Benami transaction burden of proof failed where documents and payments showed genuine transfer and ownership in the transferee's favour.

A benami allegation under the Prohibition of Benami Property Transactions Act, 1988 failed because the documentary record supported a genuine transfer: original booking, agreement to sell, GPA, later payments from the transferee's own funds, and builder endorsement in her favour. The transaction was also assessed against the section 53A part-performance exception under the Transfer of Property Act, 1882. The initiating authority had to prove benami character by cogent evidence, and suspicion could not substitute for proof. On the facts, the statutory ingredients were not established, the burden was not discharged, and the property was treated as outside the Act's mischief.

---

---

Issues: (i) Whether the property transaction in question was a benami transaction within the meaning of the Prohibition of Benami Property Transactions Act, 1988; (ii) whether the Initiating Officer discharged the burden of proving benami character by cogent evidence.

Issue (i): Whether the property transaction in question was a benami transaction within the meaning of the Prohibition of Benami Property Transactions Act, 1988.

Analysis: The transaction was supported by the original booking, the agreement to sell, the GPA, the subsequent payments made by the alleged beneficial owner from her own funds, and the builder's endorsement/transfer in her favour. The record showed that the initial allottee could not complete the payments and the later payments were made by the transferee, who thereafter stood as the real and undisputed owner. The transaction was also examined in the light of the statutory exception relating to possession and part performance under section 53A of the Transfer of Property Act, 1882.

Conclusion: The transaction was not held to be a benami transaction.

Issue (ii): Whether the Initiating Officer discharged the burden of proving benami character by cogent evidence.

Analysis: The controlling principle applied was that the burden lies on the person alleging benami character, and that suspicion cannot replace legal proof. The evidence on record did not establish that the initial payment represented consideration furnished by the alleged beneficial owner or that the statutory ingredients of benami were satisfied. The materials instead showed that the later payments came from the alleged beneficial owner's own account and that the documentary record supported the transfer in her favour. On that footing, the statutory and evidentiary burden was not discharged by the Initiating Officer.

Conclusion: The burden of proof was not discharged by the Initiating Officer.

Final Conclusion: The appeals succeeded and the impugned benami determination was set aside, leaving the property outside the mischief of the Act on the facts found.

Ratio Decidendi: In proceedings alleging benami property, the initiating authority must prove the statutory ingredients by cogent legal evidence, and where the documentary record shows payment, transfer, and ownership in favour of the apparent holder without such proof, the transaction cannot be sustained as benami.

---